Knowing which filing status is the right option for your tax filing is the first thing you’ll need to decide when filing your returns. Filing status is determined by a specific set of requirements within the tax codes. But many people are confused by which filing status they can file, and which make most sense.
Generally, filing status is determined by whether a person is married or single. From there, there are a few options to consider.
Your married status on the last day of the filing year determines the status that you can be eligible for. For example if you got married on June 13, 2016 you are eligible to file as married filing jointly. The same is true if you got married on December 31, 2016.
While at the same time, if you were legally separated or divorced during the filing year, you are considered unmarried for the entire filing year. Filing status for married, legally separated, or divorced is determined by the state laws of each individual state.
Five Tax Filing Status Options
You can file single if you are unmarried. You are considered unmarried if you were not married for the entire filing year, even if your divorce or separating ruling was not made until December of the filing year.
You are considered single if any of the following are true.
- You are unmarried.
- You are not married and living with a significant other.
- You are living together in a common-law marriage, but the state in which you live does not recognize your common-law marriage.
- You are married but have an order of legal separation.
- You are legally divorced.
If you claim dependents you might be able to file as head of household which usually allows for additional credits and deductions.
Head of Household
Filing as head of household usually results lower taxes than filing as a single or as married filing separately. You can file as head of household if:
- You are single or unmarried.
- Paid more than half the cost of keeping up a home.
- Had at least one qualifying child or other qualifying relative who lived with you in the home for more than half the year. If the qualifying relative is your parent and he or she does not have to live with you may qualify for exemptions if you paid at least half the cost of the parent’s household expenses.
If you are married you can file as head of household if:
- You and your spouse file separately.
- You pay more than 50% of the expenses of maintaining the household expenses.
- Your spouse did not live in the home for the last 6 months of the year.
- The household is the principal home of at least one qualifying child or relative.
- You can claim an exemption for a qualifying person or child.
You may also file as head of household if your spouse was a non-resident alien at any time during the year. However, your spouse does not count as a qualifying person. You must have another person within the household who is considered a qualifying exemption and meet all the other requirements to qualify for head of household.
Married Filing Jointly
If you are married and you and your spouse agree you can file a joint return. A joint filing might reduce your tax liability.
You are considered married if any of the following are true:
- You are married and living together.
- You are living together in a common-law marriage, if the state you live in or in the state where the common law marriage began, recognizes your common-law marriage as a legal marital status.
- You are married and living apart but do not have a legal separated.
- You are living separated but are only under a temporary decree of divorce.
If you and your spouse elect to file jointly you both can be held responsible, separately or together, for the tax and any interest or penalty due on your return.
Married Filing Separately
You can file married filing separately if you are married or are considered married and you and your spouse do not agree to file jointly.
If you file a separate return you generally only report your own income, credits, exemptions and deductions. Filing separate returns usually results in a higher combined tax. However, if one spouse owes taxes and the other is owed a return, this filing might be of greater benefit.
- Filing separately makes sense if you are keeping all of your financial management separate.
- Filing separately makes sense if you are seeking to safeguard your own tax refund from taxes and penalties which may be owed by your spouse.
- You are living separate but have not divorced or have a legal separation within the filing year.
Qualifying Widows and Widowers
If your spouse died during the year, you generally can file a joint return for that filing year and for two years after the death of your spouse you can file as qualifying widow(er), if the following requirements are met:
- You did not remarry.
- You qualified to file married filing jointly with your spouse in the year your spouse died.
- You pay more than 50% of the expenses of maintaining the household.
- Your home is the primary home for a qualifying child.
- You can claim an exemption for the qualifying child.
If your spouse died during the year, you are considered married for the entire year. If you remarried before the end of the year, you can file jointly with your new spouse and file a married filing separately return for your deceased spouse.
If you have questions about the best way to file your return, we are happy to make an appointment to discuss your best option, and help you to prepare your return. Just call us at, 740•374•6942 or enter your information in the contact form below.